Institute for Research on Labor and Employment

Property tax reform is a perennial topic in California politics. Ever since 1978, when Proposition 13 limited the property tax and made it more difficult to raise other taxes, many critics have argued that this law may have a variety of undesirable consequences for local government. The proposed solutions vary from outright repeal to more modest reforms that would curb the worst distributional inequities. The issue of property tax limitation is increasingly important in other states as well. Many states have adopted property tax limitations following California’s example. When the real estate market began to recover after the Great Recession, homeowners in many urban areas found their tax bills rising faster than their paychecks, and several cities and states began debating new legislation to cap property taxes. Most recently, New York State enacted a stringent property tax cap in 2012, bringing the total number of states with potentially binding limitations to 36.